The online advertising industry is on the rise. By 2021, studies predict marketing budgets will reach $120 billion collectively. Readout below to know about how blockchain could change online advertising.
Thanks to adaptable ad networks like Google and Facebook, digital marketing companies can use large-scale data analysis to decide what works best in their web advertising campaigns. As such, online advertisers can now make real connections with their target audience on various digital platforms.
Though the industry has become more efficient, it is also constantly evolving. Blockchain technology could spearhead the next stage of transformation, offering fascinating possibilities for online advertisers.
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What Is Blockchain?
The idea of blockchain is relatively straightforward. The term refers to a digital ledger that records online transactions (typically made in some form of cryptocurrency).
When somebody requests a blockchain transaction, it is broadcast to a P2P network of computers (or nodes). This network validates the transaction and requesting user via sophisticated algorithms. When the transaction is verified, it is combined with a series of other recent transactions to form a new block of data (hence the name). The block is added to the digital ledger, becomes the next block in the chain. This recorded transaction exists forever, unalterable, and publicly available.
Blockchain solves a double-spending problem that plagued many bitcoin users. Left unchecked, fraudulent users could spend cryptocurrency tokens more than once. It became easier to counterfeit the cryptocurrency and manipulate the market.
According to the World Federation of Advertisers (WFA), ad fraud will cost the industry $50bn a year by 2025. Evidently, online advertising is becoming less secure. This comes at a cost to the relationship between brands and their demographics, whether a local business advertising to consumers in their area or MNCs targeting new markets across the globe. When it comes to ad fraud, everybody is affected.
Luckily, blockchain technology can help eradicate this growing issue.
1. Blockchain allows advertisers to connect directly with their consumers
Currently, digital display ad inventories are, for the most part, controlled by Facebook and Google.
However, blockchains could potentially make these ad networks irrelevant in the relationship between brands and their audience.
This is already happening to a lesser extent, thanks to services like BAT (Basic Attention Token). This allows advertisers to pay users based on their engagement with their advertising campaign.
BAT and other similar technologies reduce the need for advertisers to use Google and Facebook while connecting them to potential customers directly. In other words, using crypto assets as a way of joining advertisers and demographics could potentially render the current online marketing model obsolete.
2. Blockchain allows for more effective ads
Blockchain could also improve the effectiveness of online ads themselves.
The aforementioned BAT tech represents an opportunity to change the way consumers interact with these ads.
For example, the BAT-powered Brave browser lets users select their desired type of content, then serves them ads based on their choices. Not only does this provide valuable data to advertisers (while protecting the anonymity of the consumer), it gives the user a streamlined online experience tailored specifically to their interests.
3. Blockchain brings transparency to the online advertising industry
As its use in the cryptocurrency world, one of the most exciting things about blockchain in the online advertising industry is transparency.
The likes of Google and Facebook have benefited financially from a lack of transparency in the online advertising world. But thanks to the security and visibility of the blockchain ledger, this practice could eventually change.
Blockchain can verify that every single person who engages with an advertisement is genuine. This means website owners will only be charged for genuine clicks to their site.
Advertising will become more efficient as a result – blockchain will enable advertisers to form customer profiles from the information consumers are willingly sharing. This will help improve targeting methods, leading to more revenue.
This blockchain advertising model will allow users to see a particular product and where it came from instantly. All the information about the product is stored on public record, taking the control away from ad networks and placing it in the consumers’ hands.
